ASSETPURCHASE AGREEMENT datedas of May13, 2010 byand among ARGODIGITAL SOLUTIONS, INC., RVUE,INC. and RVUEHOLDINGS, INC.

THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of May 13, 2010, by and among Rvue Holdings, Inc., a Nevada corporation (“Purchaser”) and Argo Digital Solutions, Inc., a Delaware corporation (“Seller”) and rVue, Inc., a Delaware corporation (“Rvue”), a wholly owned subsidiary of Seller.  Seller and Purchaser are sometimes referred to herein collectively as the “Parties” and each, individually, a “Party.”

(l)    All of the issued and outstanding shares of capital stock of Rvue consisting of 10,000,000 shares of common stock, par value $0.001 per share (the “Rvue Shares”);

 

provided that, notwithstanding the foregoing, the Assets shall not include the Excluded Assets.

 

1.02    Excluded Assets

 

   Notwithstanding anything to the contrary in Section 1.01, the following assets of Seller are excluded from the Assets (the “Excluded Assets”):

1.05    Allocation Reporting.  Schedule 1.05 sets forth the allocations established by Purchaser and Seller of the Purchase Price among the Assets, and in connection therewith:

 

1.06    Consents to Assignment.  In the event any consent required to be obtained pursuant to the terms of any Real Property Lease or Contract (excluding In-bound Intellectual Property Licenses) (collectively referred to as “Withheld Consent Contracts”) prior to the assignment of such Withheld Consent Contract by Seller to Purchaser hereunder is not obtained as of the Closing Date, Seller shall hold such Withheld Consent Contract in trust for Purchaser and carry out and comply with the terms and provisions of such Withheld Consent Contract as agent for Purchaser, under Purchaser’s direction and control, at Purchaser’s cost and for Purchaser’s benefit.  Purchaser and Seller shall use commercially reasonable efforts to obtain any such consent after the Closing Date.  Notwithstanding anything to the contrary contained in this Agreement, if any such consent is not obtained within 30 Business Days after the Closing Date, Purchaser shall have the option, exercisable at any time thereafter by written notice delivered to Seller, of treating such Withheld Consent Contract as an Excluded Asset under this Agreement, in which case Purchaser shall have no further obligation with respect to such Withheld Consent Contract and Seller will retain all benefits and liabilities arising thereunder.  Purchaser acknowledges and agrees that its option of treating any such Withheld Consent Contract as an Excluded Asset pursuant to the terms of this Section 1.06 represents the sole and exclusive recourse of Purchaser with respect to the parties’ inability to obtain any required consent to assignment of any Withheld Consent Contract, subject to Schedule 1.01(c).

1.08    The Intercompany Debt.  On the Closing Date, all intercompany indebtedness, liabilities or obligations of Rvue to Seller shall be forever discharged and released, including all interest and penalties thereon.

 

1.09    Contribution and Separation.  On the Closing Date, all obligations of Rvue to pay any amount of any Assumed Liability or Subsidiary Liability or Subsidiary Indemnity (as such terms are defined in the Pushdown Agreement) to Company, or indemnify Company, or any of Company’s affiliates, or in any manner pay or assume and debt or obligation, actual or contingent, of Company in respect to any activity of the Business or the Assumed Liabilities or any Subsidiary Liability prior to the Closing Date are hereby forgiven, waived and released in all respects, including, without limitation, pursuant to any contract, law, or agreement, including pursuant to that certain Contribution and Separation Agreement dated as of September 16, 2009 (the “Pushdown Agreement”); any and all advances and payments of any Assumed Liability or any Subsidiary Liability or Subsidiary Indemnity payment on and after March 2, 2010 by Rvue shall constitute a debt of Company to Rvue on and after the Closing Date and shall be repaid or reimbursed by Company to Rvue on or prior to the twelve month anniversary of the Closing Date, which shall accrue interest at a rate of ten (10%) percent per annum.

Seller and Seller’s Affiliates, jointly and severally, hereby represent and warrant to Purchaser as of the date hereof and as of the Closing Date (unless another date is expressly set forth below) that:

 

2.01    Existence and Power.  Seller is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, and Seller has all corporate powers and all governmental licenses, permits, authorizations, consents and approvals required to carry on its Business as now conducted.  Seller is duly qualified to conduct business as a foreign corporation and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect on Seller, the Assets or the Business.  Seller has heretofore delivered to Purchaser true and complete copies of Seller’s articles of incorporation and by-laws as currently in effect.

 

2.03    Non-Contravention.  Except as set forth in Schedule 2.03, the execution, delivery and performance by Seller of this Agreement and the Related Documents, and the consummation of the transactions contemplated hereby and thereby, do not and will not:

 

2.04    Subsidiaries.  Seller does not own directly or indirectly, any capital stock, equity interest or other ownership interest in any corporation, partnership, association, joint venture, limited liability company or other entity other than Rvue.

 

2.05    Financial Statements.  Rvue’s financial statements as of December 31, 2009 and for the period from September 15, 2009 (inception) to December 31, 2009 (the “Year End Financial Statements”) have been prepared in accordance with GAAP applied on a consistent basis during the periods involved, and fairly present the financial position of Rvue as of and for the date thereof and its results of operations and cash flows for the period then ended.  The balance sheet, income statement and statement of cash flows as of and for the three (3) months ended March 31, 2010 (the “Interim Financial Statements”) for Rvue were prepared in accordance with GAAP consistently applied, except for the absence of footnotes required by GAAP and subject to customary year-end adjustments, and fairly represent the financial position of Rvue as of the date thereof and the results of operations for the period then ended.

2.06    Receivables.  All accounts receivable, notes receivable and other receivables included in the Assets were created in the ordinary course of business consistent with past practice, of which ninety-five percent (95%) (net of an appropriate allowance, consistent with past experience) are and, on the Closing Date will be, valid, genuine and collectible.  The aging schedule of the accounts receivable of the Business, attached hereto as Schedule 2.06, is true and correct.

2.07    Absence of Certain Changes.  Since the Balance Sheet Date, Seller has conducted the Business in the ordinary course consistent with past practice and, except as set forth in Schedule 2.07 or disclosed on the Interim Financial Statements, there has not been:

2.12    User-Submitted Content.  Seller has not received and there is not pending or threatened any notice of claim or action against it relating to any other Person’s alleged rights in user-submitted content appearing provided to or through or submitted to the Rvue ad exchange that has not been resolved to the satisfaction of such Person. User-submitted content which appears on networks is, and has historically been deleted from the server as soon as reasonably practicable following receipt by Seller of any notice relating to a Person’s alleged rights in any such user-submitted content.

2.13    Contracts.  Seller has caused to be made available to Purchaser for review complete and correct copies of all written Contracts listed on Schedule 2.13, which contains a complete and accurate list of all material Contracts to which Seller is a party, or which affect the Business or the Assets.  Except as set forth in Schedule 2.13, each of the Contracts may be transferred to Purchaser without the consent of any person.  All of the Contracts are valid, binding and in full force and effect against Seller and, to Seller’s Knowledge, are valid, binding and in full force and effect against the other parties thereto.  Except as set forth in Schedule 2.13, Seller is not in default in any material respect, and no notice of alleged default has been received by Seller under any of the Contracts, no other party thereto is, to Seller’s Knowledge, in default thereunder in any material respect, and, to Seller’s Knowledge, there exists no condition or event which, with or without notice or lapse of time or both, would constitute a material default under any of the Contracts by Seller or any other party thereto.

2.14    Licenses and Permits.  Schedule 2.14 lists and correctly describes each Permit affecting, or relating in any way to, Seller, the Business or the Assets, together with the name of the Governmental Authority or entity issuing such Permit.  Except as set forth on Schedule 2.14, such Permits are valid and in full force and effect and will not be terminated or impaired or become terminable as a result of the transactions contemplated hereby and any necessary renewal applications have been timely filed.  There are no Permits which have not been obtained by Seller which are required for the proper and lawful operation of (a) all or any portion of the Assets or (b) the Business as presently conducted and as proposed to be conducted as of the Closing Date.

2.16    Employee Benefit Plans.  Except as set forth in Schedule 2.16, Seller has no (i) pension, thrift, savings, profit-sharing, retirement, incentive bonus or other bonus, medical, dental, life, accident insurance, benefit, employee welfare, disability, group insurance, stock purchase, stock option, stock appreciation, stock bonus, executive or deferred compensation, hospitalization and other similar fringe or employee benefit plans, programs and arrangements, (ii) employment or consulting contracts, “golden parachutes,” collective bargaining agreements, severance agreements or plans, vacation and sick leave plans, programs, arrangements and policies, (iii) employee manuals, or (iv) written or binding oral statements of policies, practices or understandings relating to employment, which are provided to, for the benefit of, or relate to, any Affected Employee.  To its Knowledge, Seller is not in arrears in the payment of any contribution or assessment required to be made by it pursuant to any of the agreements or arrangements set forth in Schedule 2.16.

 

2.17    Environmental Matters.  Without in any manner limiting any other representation or warranty set forth in this Agreement and except for matters disclosed in Schedule 2.17:

2.18    Tax Matters.  Seller, and each of its Affiliates has timely filed (taking into account any applicable extensions) all applicable Tax Returns and reports for all years and periods for which such returns and reports were due to be filed by it prior to the Closing Date.  Each of such Tax Returns as filed was correct and complete.  Seller and each of its Affiliates has not been and is not currently the subject of an audit, other examination, matter in controversy, proposed adjustment, refund litigation or other proceeding with respect to Taxes by the Tax authorities of any nation, province, state or locality or other governmental authority, nor has Seller or any of its Affiliates received any notices from any Tax authority relating to any such issue or potential issue.  There are no liens for Taxes upon the Assets or properties of Seller, any of its Affiliates or the Business except for statutory liens for current Taxes not yet due.  Neither Seller nor any of its Affiliates has, as of the date hereof, entered into an agreement or waiver extending any statute of limitations relating to the payment or collection of Taxes.  Seller and each of its Affiliates has timely paid all Taxes and Tax liabilities in respect of periods prior to the date hereof and has accrued on its financial statement an amount necessary to pay in full all unpaid Taxes.  Seller and each of its Affiliates has complied with all applicable Tax Laws.  Seller is, and has been since its formation, a C corporation for federal and state income tax purposes.  For purposes of this Agreement, (i) “Tax” or “Taxes” means any federal, state, provincial, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative minimum or other tax of any kind whatsoever, including without limitation, any interest, penalty or addition thereto, whether disputed or not, and (ii) “Tax Return” means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including without limitation, any schedule or attachment thereto, and including, without limitation, any amendment thereof.

2.19    Transactions with Affiliates.  Except as set forth on Schedule 2.19 and except for normal employment arrangements consistent with past practices, since December 31, 2009, Seller has not purchased, acquired or leased any property or services from, or sold, transferred or leased any property or services to, or loaned or advanced any money to, or borrowed any money from any employee, officer, director or shareholder of Seller or any of their respective Affiliates except for loans, advances or borrowings to be repaid prior to the Closing Date.

 

2.20    Fees.  Except as set forth on Schedule 2.20, Seller has not incurred any obligation or liability, contingent or otherwise, for brokers’ or finders’ fees in respect of the matters provided for in this Agreement for which Purchaser or its Affiliates, or the Business, could become liable.  Any fee due to any broker or finder representing Seller shall be the responsibility of Seller.

 

2.21    Customers and Suppliers.  Seller does not have any Knowledge of any intention or indication of intention by a significant customer or a significant supplier to terminate its business relationship with Seller or to limit its business relationship with Seller in any material respect.

 

2.22    Exclusion of Business.  Except as set forth on Schedule 2.22, Seller does not know and has not received any notice that access to Rvue server or Seller’s associated websites have been or will be blocked by any Governmental Authority in any respect or to any Person.

 

2.23    Compliance with Laws; No Defaults.

2.24    Legal Proceedings.  Except as set forth on Schedule 2.24, (i) there is no litigation pending, or to Seller’s Knowledge, threatened, by any Person or by or before any Governmental Authority, against or affecting Seller, or any shareholder of Seller (to the extent such litigation against or affecting a shareholder of Seller relates to or affects the Business or the Assets or the ability of Seller to consummate the transactions contemplated hereby), the Business or the Assets; and (ii) there is no judgment or decree requiring Seller to take any action of any kind with respect to the Assets or the conduct of the Business, or to which Seller, the Business or the Assets are subject or by which they are bound or affected in either case, which could adversely affect the financial condition or conduct of the Business, the Assets or the ability of Seller to perform its obligations under this Agreement, or which seeks or could result in the modification, revocation, termination, suspension of or other limitation of any of the Real Property Leases or Contracts.

 

2.25    Accuracy of Information Furnished.  No representation, statement or information contained in this Agreement (including, without limitation, the various Schedules and Exhibits attached hereto) or any agreement executed in connection herewith or in any certificate or other document delivered pursuant hereto or thereto or made or furnished to Purchaser or their representatives by Seller, contains or shall contain any untrue statement of a material fact or omits or shall omit any material fact necessary to make the information contained therein not misleading.  Copies of all documents listed or described in the various Schedules attached hereto and provided by Seller to Purchaser are true, accurate and complete.

Purchaser hereby represents and warrants to Seller as of the date hereof and as of the Closing Date:

 

3.01    Existence.  Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.  Purchaser is duly qualified or authorized to do business as a foreign company and is in good standing under the Laws of each jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification or authorization.

 

3.02 Authorization

3.03    Non-Contravention.  Except as set forth in Schedule 3.03, the execution, delivery and performance by Purchaser of this Agreement and the Related Documents and the consummation of the transactions contemplated hereby and thereby do not and will not:

 

3.04    Fees.  Except as set forth on Schedule 3.04, Purchaser has not incurred any obligation or liability, contingent or otherwise, for brokers’ or finders’ fees in respect of the matters provided for in this Agreement for which Seller could become liable.  Any fee due to any broker or finder representing Purchaser shall be the responsibility of Purchaser.

 

3.05    Litigation.  There is no action, suit, investigation or proceeding pending against, or to the Knowledge of Purchaser threatened against or affecting, Purchaser before any court or arbitrator or any Governmental Authority which in any matter challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated hereby.

 

3.06    Purchaser Common Stock.  All shares of Common Stock to be delivered or pledged by Purchaser pursuant to this transaction will be (i) free and clear of all Encumbrances and (ii) duly authorized, validly issued, fully paid and non-assessable when issued in accordance with the terms hereof.

 

3.07    SEC Documents; Financial Statements

3.08    Absence of Certain Changes.  Since the date of its last Form 10-K filed with the SEC, Purchaser has not suffered any change to its business which would materially and adversely affect its ability to finance the transactions contemplated hereby or which would otherwise have a Material Adverse Effect on its business.

 

4.01    Non-Solicitation.  From and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the ninetieth (90th) day following execution of this Agreement (the “No Shop Period”), neither Seller, any Seller Affiliate, nor any officer, director, employee, agent or representative of Seller shall, directly or indirectly, solicit or encourage, including, without limitation, by way of furnishing information, the initiation of or response to any inquiries or proposals regarding, or engage in or continue any discussions or enter into any agreements regarding, any merger, tender offer, sale of shares or similar business combination transactions involving Seller, the Business or the Assets, or any sale of all or substantially all the Assets, other than in connection with the transaction with Purchaser contemplated herein.  The No Shop Period may be extended upon mutual agreement of the parties for such additional periods, if any, as shall be required for satisfaction by Seller of any of the conditions to Closing.

 

4.02    Conduct of the Business.  From the date hereof until the Closing Date, Seller shall conduct its Business in the ordinary course consistent with past practice and use its best efforts to preserve intact its business organization and relationships with third parties and to keep available the services of its present officers and employees.  Without limiting the generality of the foregoing, from the date hereof until the Closing Date, Seller shall not:

Seller shall not (a) take or agree or commit to take any action that would make any representation and warranty of Seller hereunder inaccurate in any material respect at, or as of any time prior to, the Closing Date or (b) omit or agree to commit or omit to take any action necessary to prevent any such representation or warranty from being materially inaccurate in any respect at any such time.

 

4.03    Access to Information.  Seller (i) will give Purchaser, its counsel, financial advisors, auditors and other authorized representatives access, at all reasonable times following sufficient notice to Seller, to the offices, properties, books and records of Seller, (ii) will furnish to Purchaser, its counsel, financial advisors, auditors and other authorized representatives such financial and operating data and other information relating to Seller as such persons may reasonably request (iii) will instruct its employees, counsel and financial advisors to cooperate with Purchaser in its investigation of Seller including, without limitation, interviews with such individuals; and (iv) provide telephone numbers, street addresses, and e-mail addresses, as available in the records of Seller, of Seller’s significant suppliers and customers; provided, however, Purchaser shall not unreasonably interfere with the conduct of Seller’s Business.  No investigation by Purchaser or knowledge acquired by Purchaser shall operate as a waiver or otherwise affect any representation, warranty or agreement given or made by Seller hereunder.

 

4.06    Change of Names.  Promptly following the Closing, but in any event within 30 days after the Closing Date, Seller shall provide evidence to Purchaser of the change of Seller’s name and any Affiliate of Seller bearing the name “Rvue” or any variations or derivations thereof, or any trademarks, trade names or logos of Seller or any of its Affiliates bearing such names or similar names.

 

5.01    Access Prior to the Closing Date.  Purchaser will furnish to Seller, its counsel, financial advisors, auditors and other authorized representatives such financial and operating data and other information relating to Purchaser  as such persons may reasonably request; provided, however, Seller shall not unreasonably interfere with the conduct of Purchaser’s Business.  All information disclosed to Seller, its counsel, financial advisors, auditors and other authorized representatives pursuant to this Section 5.01 and otherwise in contemplation of the consummation of the transactions contemplated by this Agreement shall be subject to the terms of the Confidentiality Agreement.

5.02    Access From and After the Closing Date.  On and after the Closing Date, Purchaser will afford promptly to Seller and its agents reasonable access to the properties, books, records, employees and auditors involved in this transaction to the extent necessary to permit Seller to determine any matter relating to its rights and obligations hereunder and Seller’s federal and state income and other tax liabilities with respect to any period ending on or before the Closing Date and shall maintain them for a period of five (5) years following the Closing or for such longer period as any audit (private, tax or other governmental) of those documents is continuing; provided that any such access by Seller shall not unreasonably interfere with the conduct of the Business of Purchaser.  Seller will hold, and will use its best efforts to cause its officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other requirements of law, all confidential documents and information concerning Purchaser or the Business provided by Purchaser in connection with this transaction.

6.01    Best Efforts; Further Assurances.  Subject to the terms and conditions of this Agreement, Seller and Purchaser will use their best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable Laws to consummate the transactions contemplated by this Agreement.  Seller and Purchaser each agree to execute and deliver such other documents, certificates, agreements, corporate and shareholder approvals, and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement, but without expanding the obligations and responsibilities of any party hereunder.

 

6.02    Certain Filings.  Seller and Purchaser shall cooperate with one another (a) in determining whether any action by or in respect of, or filing with, any Governmental Authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material Contracts, in connection with the consummation of the transactions contemplated by this Agreement, including, without limitation, the filing of all notices under 15 U.S.C. §18a, and (b) in taking such actions or making any such filings, furnishing information required in connection therewith and seeking timely to obtain any such actions, consents, approvals or waivers.

 

6.03    Public Announcements.  No party shall issue any press release or otherwise announce this transaction without mutual agreement to the terms of the press release, or make any public statement with respect to this Agreement or the transactions contemplated hereby, except as may be required by applicable law or the regulations of the NASDAQ Stock Market, Inc. or such other securities exchange or trading market where the Purchaser Common Stock is regularly quoted.

 

6.04    Notice of Developments.  Each party to this Agreement will give prompt written notice to the other of any material adverse development causing a breach of any of its representations and warranties under this Agreement.

6.07    Certain Warranty Matters.  Purchaser shall perform all warranty work respecting products manufactured or sold, and services rendered, by Seller up to and including the Closing Date, and Seller shall reimburse Purchaser forthwith following demand for Purchaser’s actual cost of labor and materials incurred by Purchaser in connection therewith.

1.1 .  The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place on the Closing Date at the offices of Akerman Senterfitt, One Southeast Third Avenue, 25th Floor, Miami, Florida 33131, or at such other place and time as the Parties shall mutually agree.  The Closing shall be effective as of 12:01 a.m. on the Closing Date

7.02    Deliveries and Actions by Seller.  At the Closing, Seller shall deliver, or cause to be delivered, to Purchaser:

7.03    Deliveries and Actions by Purchaser.  At the Closing, Purchaser shall deliver or cause to be delivered to Seller, unless otherwise specified:

7.04    Conditions to the Obligations of Each Party.  The obligations of Purchaser and Seller to consummate the Closing are subject to the satisfaction, or waiver by all parties, of the following conditions:

 

7.05    Conditions to Obligations of Purchaser.  The obligation of Purchaser to consummate the Closing is subject to the satisfaction (or waiver in writing by Purchaser) of the following conditions:

7.06    Conditions to Obligations of Seller.  The obligation of Seller to consummate the Closing is subject to the satisfaction or waiver by Seller of the following conditions:

8.01    Indemnification by Seller.  Seller hereby agrees to indemnify, defend and hold harmless Purchaser and each of their respective officers, directors, stockholders, partners, members, employees, agents and affiliates (collectively, “Purchaser Indemnified Persons”) from and against any losses, liabilities, claims, obligations, damages (including, without limitation, diminution in value), strict liability, Environmental Responsibility, fines, penalties, assessments, deficiencies, actions, causes of action, arbitrations, proceedings, remediations, judgments, settlements, violations or alleged violations of law, costs and expenses (including, without limitation, reasonable attorneys’ fees and all other expenses incurred in investigating, preparing, or defending any litigation or proceeding, commenced or threatened) (collectively, “Purchaser Damages”) arising out of or resulting from:

Seller shall indemnify Purchaser Indemnified Persons for any Purchaser Damages giving rise to such indemnification, whether arising out of the strict liability or the negligence of any party or otherwise, including, without limitation, the sole negligence or strict liability of Purchaser Indemnified Persons, whether such negligence be sole, joint or concurrent, active or passive, simple or gross.

8.02    Indemnification by Purchaser.  Purchaser hereby agrees to indemnify, defend and hold harmless Seller and its respective officers, directors, stockholders, partners, members, employees, agents and affiliates (collectively, the “Seller Indemnified Persons”) from and against any losses, liabilities, claims, obligations, damages (including, without limitation, diminution in value), strict liability, fines, penalties, assessments, deficiencies, actions, causes of action, arbitrations, proceedings, remediations, judgments, settlements, violations or alleged violations of law, costs and expenses (including, without limitation, reasonable attorneys’ fees and all other expenses incurred in investigating, preparing, or defending any litigation or proceeding, commenced or threatened)  (collectively, “Seller Damages”) arising out of or resulting from:

Each of Purchaser and Purchaser, jointly and severally, shall indemnify Seller Indemnified Persons for any Seller Damages giving rise to such indemnification, whether arising out of the strict liability or the negligence of any party or otherwise, including, without limitation, the sole negligence or strict liability of Seller Indemnified Persons, whether such negligence be sole, joint or concurrent, active or passive, simple or gross.

8.03    Effect of Knowledge.  Anything contained herein to the contrary notwithstanding, the right to indemnification, payment of damages or other remedies based on the representations, warranties, covenants and other agreements contained herein or in any certificate delivered in connection with the Closing will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement, with respect to the accuracy or inaccuracy of, or compliance with, any such representation, warranty, covenant or other agreement.  Purchaser’s rights to indemnification shall not be affected or waived by virtue of (and Purchaser shall be deemed to have relied upon the express representations and warranties set forth herein notwithstanding) any Knowledge on the part of Purchaser of any untruth of any such representation or warranty of Seller expressly set forth in this Agreement, regardless of whether such Knowledge was obtained through Purchaser’s own investigation or through disclosure by Seller or another person, and regardless of whether such Knowledge was obtained before or after the execution and delivery of this Agreement.

8.04    Indemnification Procedure for Third-Party Claims.  Promptly after receipt by a party entitled to indemnification hereunder (the “Indemnified Party”) of written notice of the institution of any legal proceeding, or of any claim or demand, asserted by a third party (a “Third Party Claim”) against the Indemnified Party with respect to which a claim for indemnification is to be made pursuant to Section 8.01 or 8.02 herein, the Indemnified Party shall give written notice to the other party (the “Indemnifying Party”) of such Third Party Claim.  The Indemnifying Party shall be entitled to participate in and to assume the defense of such Third Party Claim with counsel reasonably satisfactory to the Indemnified Party, and after notice from the Indemnifying Party to such Indemnified Party of such assumption of defense, and provided that the Indemnifying Party continues to diligently pursue such defense, the Indemnifying Party shall not be liable to such Indemnified Party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof.  Notwithstanding the foregoing, an Indemnified Party shall in all cases be entitled to control its defense, including, without limitation, the selection of separate counsel (at the cost and expense of the Indemnifying Party), of any Third Party Claim if such claim: (i) may result in injunctions or other equitable remedies in respect of the Indemnified Party which would affect its business or operations in any materially adverse manner; (ii) may result in material liabilities which may not be fully indemnified hereunder; (iii) may have a significant adverse impact on the business or the financial condition of the Indemnified Party (including, without limitation, a Material Adverse Effect on the tax liabilities, earnings or ongoing business relationships of the Indemnified Party) even if the Indemnifying Party pays all indemnification amounts in full or (iv) the anticipated defendants in any such situation, proceeding or action include, without limitation, both the Indemnified Party and the Indemnifying Party, and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from, additional to or inconsistent with those available to the Indemnifying Party; provided, however, that in no event shall an Indemnifying Party be required to pay fees and expenses under this indemnity for more than one firm of attorneys (in addition to local counsel) in any jurisdiction in any one legal action or group of related legal actions.  No Indemnifying Party will enter into any settlement with respect to such Third Party Claim without the prior written consent of the Indemnified Party unless such settlement (a) requires solely the payment of money damages by the Indemnifying Party and (b) includes, without limitation, as an unconditional term thereof the release by the claimant or the plaintiff of the Indemnified Party and the persons for whom the Indemnified Party is acting or who are acting on behalf of the Indemnified Party from all liability in respect of the proceeding giving rise to the Third Party Claim.

8.05    Limitations on Indemnification.

8.06    Non-Exclusive Remedy.  Except as otherwise provided herein, and subject to the limitations set forth in Section 8.05, (a) none of the remedies provided in this Agreement nor specific performance are the exclusive remedy of either party for a breach of this Agreement and (b) the parties have the right to seek any other remedy in law or equity or in addition to and lieu of or in addition to any remedies provided for in this Agreement, including, without limitation, an action for damages for breach of contract.  Purchaser and Purchaser may set off any amount to which either may be entitled under this Agreement against any amount to which Seller otherwise would be entitled under this Agreement, including, without limitation, the Escrow Funds and for payment of such amounts to which it may be entitled.

9.02    Effect of Termination.  If this Agreement is terminated as permitted by Section 9.01, such termination shall be without liability of any party (or of any shareholder, director, officer, employee, agent, consultant or representative of any party) to another party to this Agreement; provided, however, that if such termination shall result from the willful failure of any party to fulfill a condition to the performance of the obligations of another party or to perform a covenant of this Agreement or from a willful breach by any party to this Agreement, such party shall be fully liable for any and all Losses incurred or suffered by the parties as a result of such failure or breach.  The provisions of Sections 6.03 and 10.04 shall survive any termination hereof pursuant to Section 9.01.

10.01    Survival.  The representations and warranties of Purchaser and Seller contained in this Agreement shall survive the Closing for a period of twelve (12) months after the Closing Date; provided, however, that (a) the representations and warranties made in Section 2.18 (Tax Matters) and Section 2.17(Environmental Matters) shall survive the Closing until the later of (i) ninety (90) days after the expiration of the appropriate statute of limitation or (ii) three (3) years after the Closing Date, and (b) the representations and warranties made in Section 2.01 (Existence and Power of Seller), Section 2.02 (Authorization), Section 2.03(a) (Non-Contravention), Section 2.09(a) (Ownership of Assets), Section 2.19 (Transactions with Affiliates), Section 3.01 (Organization of Purchaser), Section 3.02 (Authorization), and Section 3.03(a) (Non-Contravention) shall survive the Closing indefinitely.

 

Each of the above persons may change their address or facsimile number or telephone number by notice to the other persons in the manner set forth above.

 

10.03 Amendments; No Waivers.

 

10.04    Expenses.  Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.

 

10.05    Successors and Assigns.  The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.  No party to this Agreement may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other party hereto; provided that Purchaser may assign its rights and obligations under this Agreement to any of its subsidiaries or Affiliates, provided that any such assignee agrees in writing to be bound by all of the terms of this Agreement and that no such assignment shall relieve Purchaser of its obligations hereunder which shall thereafter be joint and several as between Purchaser and its assignee.  Neither this Agreement nor any provision hereof is intended to confer upon any person other than the parties hereto any rights or remedies hereunder.

 

10.06    Governing Law.  This Agreement shall be construed and enforced in accordance with and governed by the law of the State of New York without regard to any provision thereof that would allow or require the application of the law of any other jurisdiction.  The parties hereby agree that any dispute between or among them arising out of or in connection with this Agreement shall be adjudicated only before a Federal court located in New York, New York, and they hereby submit to the exclusive jurisdiction of the federal courts located in New York, New York, with respect to any action or legal proceeding commenced by any party, and irrevocably waive any objection they now or hereafter may have respecting the venue of any such action or proceeding brought in such a court or respecting the fact that such court is an inconvenient forum, relating to or arising out of this Agreement, and consent to the service of process in any such action or legal proceeding by means of registered or certified mail, return receipt requested, in care of the address set forth above or such other address as the undersigned shall furnish in writing to the other.

 

10.07    Specific Performance.  Each of the parties acknowledges and agrees that the other parties would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the parties agrees that the other parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof, in addition to any other remedy to which it may be entitled, at law or in equity.

10.08    Counterparts; Effectiveness.  This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  Facsimile copies of signature pages shall have the same legal effect as signed originals.  This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto.

10.09    Entire Agreement.  This Agreement, the Schedules and Exhibits hereto, the Related Documents and any other documents referred to herein constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the parties with respect thereto.  No representation, inducement, promise, understanding, condition or warranty not set forth herein has been made or relied upon by either party hereto.

 

10.10    Construction.  The parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.  The following rules of construction shall apply to this Agreement:

 

10.11    Severability.  Any part of this Agreement which is found to be void, invalid, illegal or unenforceable, shall be severed from this Agreement and ineffective to the extent of that voidness, invalidity, illegality or unenforceability.  Such voidness, invalidity, illegality or unenforceability will not invalidate, affect or impair the remaining provisions of this Agreement.  If a court of competent jurisdiction determines that the terms in respect of which covenants in this Agreement are to be entered are unreasonable or unenforceable for any reason, then this Agreement shall be reread and construed with such terms, as may be applicable, as determined to be reasonable by a court of competent jurisdiction and the Agreement shall be amended and construed accordingly hereby.

“Seller Plans” shall have the meaning assigned to such term in Section 6.06(f).

 

“Subsequent Financing” means the contribution of a minimum of $1,000,000 in cash to be made by the Investors to the Purchaser on the Closing Date, pursuant to a private placement under Section 4(2) of the Securities Act or Rule 506 of Regulation D (“Regulation D”) promulgated thereunder, as described in Section 4.1 hereof.

“Transfer Tax” shall mean any transfer, documentary, sales, use or other taxes arising in connection with the transactions contemplated by this Agreement and any recording or filing fees with respect thereto.